How Canada's Money Works

Bank of Canada, CDIC, OSFI, FCAC — the system behind your money.

Module 1 of 8

The Bank of Canada: Canada's central bank

What you'll learn

Sets the overnight rate (policy rate)
Inflation target: 2% (±1%)
Meets 8 times per year to set rates
Prints banknotes, regulates money supply

The Canadian number

2% (1-3% range)

Bank of Canada inflation target

Source: Bank of Canada

The story

The Bank of Canada is independent from the federal government. They have one mission: keep inflation around 2%. When inflation is too high, they raise rates. When it's too low (or unemployment too high), they cut. Your mortgage, HISA rate, and credit card interest all trace back to this one decision.

This week's action

Bookmark the Bank of Canada 'Rate Decision' dates at www.bankofcanada.ca. Eight times a year your mortgage rate could move.